Yes, the principle of regulating bank capital seems sensible.

The equity capital of banks urgently needs to be substantially increased.

Banks capital, therefore, is what stands between bad loans and insolvency.

But there is a much simpler step that would make a big difference A senior policymaker, such as a member of the Federal Reserve s Board of Governors or the president of the New York Fed, should make a speech that explains clearly what bank capital is (and what it is not).

If the US wants to place size limits and tighter capital requirements on banks, it should be free to do so.

Another 1.5 trillion is needed to bring banks capital back to pre crisis level, which is needed to resolve the credit crunch and restore lending to the private sector.

European banks have been operating on a great deal of debt and very little shareholder capital the essential buffer against potential losses.

Many European banks, however, have less equity than their US counterparts, which creates an important source of vulnerability going forward.

More important, it makes no sense to put new capital into banks that cannot return profits for the foreseeable future.

In the case of the banks that required state rescues, European competition rules are requiring divestment and downsizing.

Higher equity capital requirements, for example, require banks to fund themselves with relatively more equity and relatively less debt.

They are wary of rocking the financial boat, so they go easy on financial reform and refuse to insist on more equity capital for banks.

Investment banks like Bear Stearns and Lehman Brothers got into trouble because they had too little equity capital far less than 10 .

If modern banks are too big and too dangerous because they are too vulnerable, the most obvious way to make them safer is to demand higher capital requirements. Historically, that was the course advocated in most international discussions.

WASHINGTON, DC European leaders are convinced that bank capital is expensive, in the sense that raising capital requirements would slow economic growth.

When a bank s capital falls below a pre specified limit, its cocos automatically convert from debt to equity at a fraction of their previous price.

Banks capital simply refers to their equity funding how much of their liabilities are owned by shareholders rather than being owed to creditors as some form of debt.

Meanwhile, the lack of bank capital will continue, weighing heavily the European economy s short run performance and undermining its longer term growth potential.

A closed end fund (or closed ended fund) is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund.

Rather than holding an investment in our bodies, we re all at risk of becoming capital my body, but somebody else s capital.

Host regulators are increasingly nervous about banks that operate in their jurisdictions through branches of their corporate parent, without local capital or a local board of directors.

If European banks had enough capital, a reduction in the value of Greek and other debt would reduce shareholder equity and disappoint investors, but it would not cause a banking crisis.

At the same time, many very small businesses cannot get credit, because the local banks on which they depend have inadequate capital, owing to accrued losses on commercial real estate loans.

And the greatest devils of our economic age lurk in the details of how officials regard the capital the equity funding of our largest banks.

Additionally, strategies to circumvent the Basel rules made banks more complex and difficult to manage and supervise.

And Hoenig s index should be picked up and publicized by a major organization, such as the IMF.

Examples of concrete ways of strengthening the collaboration between university and industry

Be it because of a sovereign default or because of large losses accumulated under complacent accounting rules, the insolvency of a large bank (particularly a European bank) is far from a remote possibility.

New brands can assert themselves by acquiring symbolic capital.

The more thinly capitalized banks are, the more severe these distortions and the larger the expected costs rising from insulating executives from potential losses to non shareholder stakeholders.

After the crisis, world leaders and central bankers overhauled banking regulations, first and foremost by rectifying the Basel prudential rules.

At the end of 2012, China s commercial banks held 6.4 trillion in core capital and 1.5 trillion in non performing loan provisions, for a risk cushion of roughly 8 trillion.

A country that has a balanced current account does not need any additional foreign capital.

The African Development Bank s capital was increased by 200 , as was the Asian Development Bank s.

We need new capital, and new approaches to management, in the banking system.

Building support for legislation to simplify the biggest banks would greatly strengthen the hand of those regulators who want to require more shareholder equity and better regulation for the shadows.

They successfully develop a circulative capital to create more jobs and income in the community.

Banks that grant risky loans on too little equity illustrate the analytical value of homo economicus particularly clearly. Their profits are privatized, but any losses exceeding their equity are dumped on their creditors, or, even better for them, on the taxpayers.

The problem is that the Basel capital rules whether Basel I, II, or III are of no help in separating the weak banks from the sound ones.

Now that the European Banking Authority has finally issued new prudential rules, they can get about the business of raising the capital they need as a buffer against losses.

The mutual fund industry, one can assume, feared that the SEC s rules would induce customers to redirect much of their cash directly into banks.

But the long run can be long indeed, and the influence of speculative capital flows can be substantial and sustained.

Both investors and publicly traded firms are operating in increasingly integrated global capital markets.

Encouraging banks to turn loans kept on their books into securities also helped reduce the overall level of caution in the extension of credit. Additionally, strategies to circumvent the Basel rules made banks more complex and difficult to manage and supervise.

These are the rules of the game, of democracy, he said.